LHR777
Topic Author
Posts: 645
Joined: Sat Nov 05, 2005 6:14 pm

British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 7:19 am

British Airways posted the following half-year headline results at 0700GMT this morning:


  • Operating profit of £556 million
  • Operating margin of 12.5 per cent
  • Profit before tax of £593 million
  • Longhaul fleet order announced
  • Terminal 5 customer trials continuing
  • Full year fuel costs expected to top £2 billion
  • Ten per cent operating margin on track


Quote:

From Willie Walsh:

We achieved an operating profit of £556 million, up £114 million on last
year, while the operating margin of 12.5 per cent is up 2.7 points on the
first half of 2006-07.

Profit before tax for the half-year was £593 million, up £122 million on
last year.

Altogether, decent financial performance from BA. Your thoughts?
 
anstar
Posts: 3138
Joined: Sun Nov 23, 2003 3:49 am

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 7:55 am

Quoting LHR777 (Thread starter):
Operating margin of 12.5 per cent



Quoting LHR777 (Thread starter):
Ten per cent operating margin on track

Hmm... Doesn;t the last one slightly contradict itself? Sureley they have met the 10% operating margin if the operating margin is 12.5%
 
Tristarsteve
Posts: 3601
Joined: Tue Nov 22, 2005 11:04 pm

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 8:03 am

Quoting ANstar (Reply 1):
Hmm... Doesn;t the last one slightly contradict itself? Sureley they have met the 10% operating margin if the operating margin is 12.5%

The operating margin for the first half is 12.5%. The second half of BAs year is always poorer than the first half, but if the year continues then they will achieve 10% for the full year to end Mar 2008.
 
Speedbird2155
Posts: 690
Joined: Wed Feb 02, 2005 7:44 am

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 8:07 am

Quoting ANstar (Reply 1):
Hmm... Doesn;t the last one slightly contradict itself? Sureley they have met the 10% operating margin if the operating margin is 12.5%

No it doesm't. The 10% is the goal for the full year. We need to maintain this performance to achieve that. If we fall short in any of the periods coming up, this will impact on our ability to achieve the 10%.

As for these results, congrats to everyone involved. It hasn't been an easy period for us, but it's good to see our hard work during these times aren't in vain. The next year will continue to be a challenge, but I know we will rise to the challenge and help our customers through the changes over the next year.

On another good note, it appears that the changes to the handbaggage rules in the UK look set to changes soon. It's been rumoured, but Willie Walsh himself confirmed that he is also expecting this. Based on the info I've been given, it seems likely to be January.

[Edited 2007-11-02 01:07:52]
 
anstar
Posts: 3138
Joined: Sun Nov 23, 2003 3:49 am

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 8:12 am

Quoting TristarSteve (Reply 2):

The operating margin for the first half is 12.5%. The second half of BAs year is always poorer than the first half, but if the year continues then they will achieve 10% for the full year to end Mar 2008.

Thanks for clearing that up.... perhaps the article could have been a bit more clearer... ie FULL YEAR operating margin of 10% on track.,.
 
Bongodog1964
Posts: 3542
Joined: Wed Oct 18, 2006 6:29 am

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 9:30 am

One interesting quote from the BA press release "non premium North Atlantic traffic remains soft"

It could be argued from this that the drop off in US tourism to the UK as a result of the weak dollar, has not been compensated by an increase in UK tourists going to the US to take advantage of it.

This effect doesn't look good for the airlines hoping to hop onto the LHR bandwaggon next year, especially those whose premium products aren't up to scratch.
 
Bellerophon
Posts: 524
Joined: Thu May 09, 2002 10:12 am

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 10:22 am

Bongodog1964

...It could be argued from this that the drop off in US tourism to the UK as a result of the weak dollar, has not been compensated by an increase in UK tourists going to the US to take advantage of it....

I would say that you are correct, but why it is happening is open to debate!

Could it be because potential tourists from the UK are gradually getting fed up with the sort of welcome they frequently receive upon arrival in the USA, and are deciding to vacation elsewhere instead?

The arrival experience is now highly variable for many who visit the USA, and this may gradually be having an effect on discretionary travel plans.

I don't blame the USA one bit for tightening its entry procedures, in the wake of 9/11, but it is possible to be diligent and efficient, whilst remaing pleasant at the same time, as many immigration officers in my favourite airport, TPA, regularly prove.

Best regards

Bellerophon
 
scotron11
Posts: 1432
Joined: Tue Feb 10, 2004 4:54 pm

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 10:35 am

Quoting Speedbird2155 (Reply 3):

As for these results, congrats to everyone involved. It hasn't been an easy period for us, but it's good to see our hard work during these times aren't in vain. The next year will continue to be a challenge, but I know we will rise to the challenge and help our customers through the changes over the next year.

I agree. Talk about "Annus Horribilis"!! Hopefully the worst is behind them now.
 
APYu
Posts: 487
Joined: Fri Sep 21, 2007 10:23 pm

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 11:11 am

Enough money made to bring back proper food on UK Domestics and ditch those bloody cheap and nasty SkyBites!!

Well done B.A.
We'd like to welcome in particular our Executive Club members and those joining us from our Oneworld alliance partners.
 
StarGoldLHR
Posts: 1346
Joined: Mon Feb 16, 2004 1:29 am

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 11:12 am

Maybe we're finally seeing passengers vote with their feet..

Heathrow is a dump to put it mildly and how they treat people is disgusting.

In the US Immigration treats everyone as a criminal and gives them a kicking on entry...
And as the currency is starting big declines.. Americans cant afford to travel.

so now we see, people avoiding "Hells own airport" and the the US.
So far in 2008 45 flights and Gold already. JFK, IAD, LGA, SIN, HKG, NRT, AKL, PPT, LAX still to book ! Home Airport LCY
 
LHR777
Topic Author
Posts: 645
Joined: Sat Nov 05, 2005 6:14 pm

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 12:45 pm

Quoting StarGoldLHR (Reply 9):
Maybe we're finally seeing passengers vote with their feet..

Evidently, you appear to anti-BA, which is fine, thats your choice.

However, "people voting with their feet" isn't reflected in the fact that BA achieved an operating profit of £556 million, up £114 million on last year and profit before tax for the half-year was £593 million, up £122 million on last year.

Unless you mean "people voting with their feet" and leaving other carriers to fly with BA instead!

Whilst non-premium traffic has been soft on the North Atlantic and Europe, Club World performed strongly, contributing to a 2.5 per cent increase in premium traffic.

I would say the 'soft' performance on the North Atlantic is due to a weak dollar versus the pound, but this is being offset by the strong Club World performance.
 
FlyingAY
Posts: 416
Joined: Thu Jun 21, 2007 2:26 pm

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 1:07 pm

Quoting LHR777 (Reply 10):
Unless you mean "people voting with their feet" and leaving other carriers to fly with BA instead!

You actually cannot say anything about market share by looking at the profit figures of just a single carrier. We would have to know how other airlines are doing as well and how many passengers were transported.

Anyway, impressive result from BA and in line with the expectations as many other major carriers have posted good results too.
 
LHR777
Topic Author
Posts: 645
Joined: Sat Nov 05, 2005 6:14 pm

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 1:17 pm

Quoting FlyingAY (Reply 11):
You actually cannot say anything about market share by looking at the profit figures of just a single carrier. We would have to know how other airlines are doing as well and how many passengers were transported.

Exactly correct. Anything else would be merely idle speculation.
 
DLPMMM
Posts: 2265
Joined: Wed Apr 20, 2005 12:34 am

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 1:49 pm

Quoting LHR777 (Reply 10):
Whilst non-premium traffic has been soft on the North Atlantic and Europe, Club World performed strongly, contributing to a 2.5 per cent increase in premium traffic.

It could be that non-premium traffic (very price sensitive) is being pushed toward other EU carriers over the atlantic where they don't have to pay the UK's longhaul "green tax".

How is the non-premium TATL traffic on LH and KL for the last quarter?

If it was also weak, then the weak dollar or TSA are the likely culprits, if not, look to the UK's extra tax.
 
jmc757
Posts: 1228
Joined: Thu Mar 09, 2000 3:36 am

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 6:22 pm

Quoting LHR777 (Reply 10):
Unless you mean "people voting with their feet" and leaving other carriers to fly with BA instead!

Reading the thread it seems when he says "people voting with their feet" he is commenting about people flying from airports other than Heathrow, not speculating on BA's passenger figures...
 
vv701
Posts: 5895
Joined: Fri Aug 19, 2005 10:54 am

RE: British Airways Half-year Results (2Nov07)

Fri Nov 02, 2007 7:18 pm

Passenger numbers are not always key as to how successful an airline is.

In the six months covered by the figures published by BA today the airline has converted a significant number of its long haul 'Lo J' 744s (with 38 Club World seats) to the new 'Mid J' configuration (with 52 Club World seats).

When completed in the next month or so these 744 conversions will have had the effect of increasing the total number of Club World seats BA has in service by 8 per cent. However the total number of seats BA has on offer will have declined significantly. Very approximately, for every Club World seat added to a 'Lo J' BA 744, 2.5 World Traveller M-class seats are removed. However the yield from one J-class seat is usually way above the yield from 2.5 M-class seats.

So in this period it would have been expected that BA's revenue, yield and profit would increase and passenger numbers would decline. And we can expect to see a further decline in passenger numbers in the second half but with every prospect of BA again being the world's most profitable passenger airline.

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